How to Finance a Downtowner Inns Franchise: Flat Fees and SBA
By Chris Cornella
A Downtowner Inns franchise loan is usually about one thing above all else: the hotel building. Downtowner Inns is an economy lodging brand aimed at limited-service properties in city centers and downtown locations, and owners typically come to an economy flag like this one by buying or converting an existing hotel. That puts the property, its condition and its cash flow at the center of the financing conversation.
This article covers what the franchisor publishes about its fees, how owners come to the brand and how SBA and conventional financing may fit. It is general information only. US Professional Funding is not affiliated with, sponsored by or endorsed by Downtowner Inns; the name is used only to describe the business. Figures from the franchisor’s disclosure document and fee materials can change, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice.
Downtowner Inns Franchise Loan at a Glance
- Franchisor: Hospitality International, Inc., based in Tucker, Georgia, which says it has offered hotel franchise development since 1982
- Brand formats: Downtowner Inns and Downtowner Inns & Suites, generally limited-service hotels in city center or downtown locations at an economy room rate
- Application fee: $1,995, according to the franchisor’s 2025 fee summary, which lists the same application fee for each of its brands
- Initial franchise fee: the 2025 fee summary lists initial franchise fees ranging from $7,500 to $15,000 across the franchisor’s brands; confirm the Downtowner amount in the current disclosure document
- Royalty and marketing: a combined flat monthly fee rather than a percentage of room revenue, with a combined minimum of at least $750 per month, according to the franchisor
- System size: the franchisor reports more than 230 hotels across its brands in North America, in more than 30 states and Canada
- SBA Franchise Directory: listed as Downtowner Inns/Downtowner Inns & Suites (code S3142), with notes on third-party management agreements and lien position
The franchisor does not publish a minimum net worth or liquid capital figure for Downtowner owners in the materials we reviewed, and we could not access a current Downtowner disclosure document, so no initial investment range is stated here. Review Items 5, 6 and 7 of the current disclosure document before you size a loan.
What Is Downtowner Inns?
Downtowner Inns is one of five economy hotel brands franchised by Hospitality International, Inc. The franchisor positions the brand for owners of limited-service properties in downtown or city-center locations who want to keep control of their facilities and their room rates, and it promotes “personal and prompt common sense service” rather than an elaborate amenity package.
The franchisor says its royalty and marketing charges are flat fees, not a percentage of revenue, and it markets itself as avoiding unnecessary property improvement plans and key money, the upfront payments some brands offer in exchange for longer, more restrictive commitments.
Why the brand model matters to a lender. An economy flag does not carry the recognition of a national upper-midscale brand, so lenders lean heavily on the property itself: location, condition, occupancy history and the owner’s experience. A lower fee load can leave more cash flow for debt service. Our article on branded versus independent hotels explains how a flag can affect value.
Downtowner Inns Franchise Costs
Application and initial franchise fees
According to the franchisor’s 2025 fee summary, every brand carries a $1,995 application fee, and initial franchise fees range from $7,500 to $15,000 depending on the brand. The summary does not label each amount by brand, so confirm the Downtowner fee in Item 5 of the current disclosure document.
The hotel itself
For most owners the real estate is the largest cost by far: the purchase price of an existing hotel, or a property you already own and are converting. Lenders will order an appraisal and a property condition report to judge whether the price and loan amount are supported.
Renovations and brand standards
Expect the franchisor to require signage, guest room refreshes, soft goods, lobby updates and repairs uncovered during inspection before a property opens under the flag. Our article on financing a property improvement plan explains how owners fund brand-required work.
Reservation and technology costs
The franchisor’s 2025 fee summary lists per-reservation fees that vary by booking channel, starting at $2.05 for certain third-party online booking channels and $3.35 for others. Property management system connectivity carries a $195 one-time setup fee and $39 in monthly maintenance. The franchisor says fees are reviewed every July, with 30 days’ written notice of changes.
Working capital and total investment
Plan for payroll, insurance, utilities, supplies, marketing and reserves while the property transitions to the new flag, and compare the Item 7 table in the current disclosure document with contractor bids for your actual hotel.
Ongoing Fees and How They Affect Your Loan
When a lender sizes a Downtowner Inns franchise loan, it looks at the cash flow left after operating expenses, and franchise fees come off the top. The franchisor describes its royalty and marketing fees as a combined flat monthly charge, with a minimum of at least $750 per month, rather than a percentage of rooms revenue.
A flat fee does not rise when revenue rises, which can help a strong property, but it also does not fall when occupancy dips, so treat it as a fixed cost in stress tests. Per-reservation fees move with booking volume and should be modeled against your expected channel mix.
Lenders add these costs to management fees, payroll, utilities, taxes, insurance and a replacement reserve before calculating debt service coverage, so a budget that leaves any of them out overstates the loan the hotel can support.
Franchisor Requirements for New Owners
The franchisor approves both the owner and the property. Expect the review to cover the hotel’s location, condition and room count, along with your financial capacity and hospitality experience. Hospitality International does not publish a fixed minimum net worth or liquidity requirement for Downtowner owners in the materials we reviewed.
In general, an owner contacts the franchisor’s regional development team, submits an application and fee, has the property reviewed, signs the franchise agreement and completes required work and training before reopening under the brand. Many owners run brand and loan approvals in parallel.
Ways to Own a Downtowner Inns
Converting a hotel you own, or buying one to convert. An owner of an independent hotel, or one under another flag, may apply to convert. A current owner may refinance and fund the conversion work in the same loan; a buyer converting at purchase will be underwritten on the as-is value, the cost to convert and projected performance under the flag. Our article on conversion franchise financing covers how lenders view re-flagging.
Buying an existing Downtowner Inns. A buyer taking over a property already flagged with the brand must be approved by the franchisor under the transfer provisions of the franchise agreement. The property’s operating history gives a lender actual results to underwrite. See our page on hotel and motel acquisition financing.
Financing Options for a Downtowner Inns Franchise
SBA 7(a) loans. The SBA 7(a) program can be used to buy an existing hotel and, in some cases, to fund renovations, franchise fees and working capital in the same Downtowner Inns franchise loan. The 7(a) program maximum is currently $5 million, and program rules can change.
SBA 504 loans. SBA 504 loans are designed for owner-occupied real estate and long-lived fixed assets, pairing a bank loan with a certified development company loan and a borrower contribution, subject to program rules. Our comparison of SBA loan options for hotels explains when each tends to fit.
Conventional hotel loans. Owners with strong liquidity and an operating record may use conventional business loans, particularly to refinance or to buy more than one hotel.
Furniture, fixtures and equipment financing. Guest room furniture, mattresses, televisions, HVAC units and laundry equipment can sometimes be financed separately; the primary lender will count that debt.
Working capital and lines of credit. Downtown demand can swing with events, business travel and seasons, and a conversion can take rooms out of service. See our page on hotel working capital and lines of credit.
Seller financing on resales. A seller may sometimes carry part of the price. Lenders and SBA rules may limit seller notes, which are typically subordinate to the primary loan.
SBA Loans for Downtowner Inns Franchisees
SBA-backed loans are made by participating lenders with an SBA guarantee on part of the loan.
The directory listing. Downtowner Inns appears on the SBA Franchise Directory as Downtowner Inns/Downtowner Inns & Suites under code S3142. A listing can simplify the lender’s review of the franchise documents, but it does not approve any borrower or guarantee a loan.
What the directory notes mean. The listing carries two notes. First, if the applicant also operates under a management agreement with a third party, the lender or certified development company must review that agreement under SOP 50 10 to determine whether the applicant and the management company are affiliated, and the applicant is not eligible if the management company is, or is affiliated with, the franchisor. In plain English, an independent management company is fine to consider, but a hotel managed by the franchisor or its affiliate would not qualify. Second, the lender must obtain the correct lien position on all collateral as SOP 50 10 requires, so it will confirm where its liens sit on the hotel, furniture and other assets relative to other creditors.
SBA application tips. Have the franchise approval, any management agreement, a renovation budget and a sources and uses statement ready with personal financial statements, tax returns and résumés.
How Lenders Evaluate a Downtowner Inns Deal
Personal credit and financial history. Lenders review the credit history, tax returns and existing debts of each principal owner, and significant owners typically provide personal guarantees.
Net worth and liquidity. Expect questions about the cash you will put in and the reserves left after closing.
Hotel operating experience. Prior hotel ownership or management weighs heavily. First-time owners may strengthen a request by partnering with an experienced operator or hiring a qualified independent management company.
Projections. For a conversion, lenders want to see expected occupancy and average daily rate under the flag, with flat fees and per-reservation fees built in, and documented downtown demand drivers such as offices, hospitals, universities and event venues.
The disclosure document and franchise agreement. Lenders review the term, renewal and transfer provisions in Item 17 and want the franchise term to fit the loan term.
Property and historical financials. An appraisal, condition report and environmental review are standard, and older downtown buildings may need attention to roofs, elevators and fire systems. For an existing hotel, lenders study several years of operating statements. Our article on hotel loan requirements explains how occupancy, rate and cash flow are underwritten.
Multi-Unit Growth
Each Downtowner property typically has its own franchise agreement and approval, so a second hotel means a new application and usually a new Downtowner Inns franchise loan. Lenders will look at the first hotel’s performance, your global cash flow and remaining liquidity. SBA program limits apply across a borrower’s SBA loans, so larger portfolios often shift toward conventional financing.
Real-World Scenarios
An independent owner re-flagging. An owner of an older independent downtown motel wants a brand and reservation system without a percentage-based fee. The owner refinances and folds conversion work and signage into the new loan.
A first-time buyer with a management company. A buyer with capital but no hotel background purchases a city-center property and hires an independent management company. The lender reviews the management agreement early because of the affiliation note on the directory listing.
Common Mistakes to Avoid
- Budgeting for the purchase price but not conversion work, signage or reserves
- Treating a flat monthly franchise fee as if it will shrink in a slow month
- Ignoring per-reservation fees when projecting cash flow by booking channel
- Hiring a management company without checking the SBA directory note on affiliation
- Signing a purchase contract before confirming brand approval and financing timelines
- Underestimating repairs on an older downtown building
For more, read the hotel loan mistakes owners make most often.
Next Steps to Finance Your Downtowner Inns Franchise
Step 1: Identify the property. Decide whether you are converting a hotel you own, buying and converting, or buying an existing Downtowner.
Step 2: Request and review the disclosure document. Review Items 5, 6, 7, 10 and 17 with a franchise attorney.
Step 3: Build a full budget. Include the purchase or refinance, renovations, franchise fees, technology, working capital and a contingency.
Step 4: Talk with a financing specialist early. Confirm which structures may fit before you sign a contract. Our SBA loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
Step 5: Assemble your documents. Gather financial statements, tax returns, résumés, the contract and any management agreement.
Step 6: Apply to the brand and the lender in parallel. Keep both approvals on the same timeline as your contract.
Downtowner Inns Franchise Loan FAQs
How much does a Downtowner Inns franchise cost?
The franchise fees are modest: the franchisor’s 2025 fee summary lists a $1,995 application fee and initial franchise fees ranging from $7,500 to $15,000 across its brands. The total cost depends mainly on the hotel you buy or own and the work it needs. Check Item 7 of the current disclosure document for the franchisor’s estimate.
What is the Downtowner Inns royalty?
The franchisor describes a combined flat monthly royalty and marketing fee rather than a percentage of revenue, with a minimum of at least $750 per month. Confirm the exact Downtowner fee in Item 6.
How much net worth or liquid capital do I need?
The franchisor does not publish a minimum in the materials we reviewed. Lenders will expect enough equity for the purchase and renovations plus reserves after closing.
Can I get an SBA loan for a Downtowner Inns?
Possibly. The brand is listed on the SBA Franchise Directory under code S3142. Eligibility still depends on the borrower, the property, program rules and lender approval.
Can I buy an existing Downtowner Inns?
Yes, if the franchisor approves you under the transfer provisions of the franchise agreement. The hotel’s operating history gives lenders actual results to underwrite.
Can I finance renovations and furniture?
Often, through the acquisition or refinance loan or separate equipment financing, depending on lender review.
Do I need hotel experience?
It weighs heavily with both the franchisor and lenders. Buyers without it may partner with an experienced operator or hire an independent management company.
Does the franchisor offer financing?
Check Item 10 of the current disclosure document. Owners who do not use franchisor financing arrange their own loans.
How long is the franchise agreement?
The term, renewal and transfer rules appear in the franchise agreement and Item 17. Lenders generally want the franchise term to extend at least as long as the loan.
Can I own more than one Downtowner Inns?
Yes. Each property typically needs its own franchise agreement and approval, and lenders will look at your existing hotels before financing the next one.
Final Thoughts
A Downtowner Inns franchise loan is really a hotel loan with a low-cost flag attached. Owners who focus on the property’s condition and location, budget for conversion work and model the flat monthly fees correctly give themselves the best chance of a smooth approval.
US Professional Funding helps owners buy, convert, renovate and refinance franchised hotels. Learn more about our franchise financing and hotel and motel financing.
